Fairfax Media will continue its plan to spin off real estate classifieds and services business Domain ending the private equity auction for publisher, after TPG Capital formally walked away from bidding and Hellman & Friedman failed to lodge a bid.

But Fairfax chief executive Greg Hywood said the company has put an end to the private equity process and will inform the market on Monday of its intention to push ahead with its plans for Domain.

Fairfax is focused on listing Domain. Dominic Lorrimer

"Now this distraction is over it is back to business as usual," Mr Hywood said on Sunday. "As you know the bids from the two private equity players were unsolicited.

"But once we received the above market indicative bids we acted in the best interests of our shareholders and ran a process. It is common in these situations for indicative bids not to translate to binding bids."

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Fairfax will aim to move on without the distraction of the potential takeover offers from the US-based private equity firms and follow its timeline of spinning off Domain by the end of 2017 announced in February. Fairfax will keep a 60 per cent to 70 per cent stake in Domain and the rest will go to existing shareholders.

The company has been pressing forward with its plans for Domain throughout the auction process including a move into the mortgage market.

Fairfax shares had been trading around $1.20 until speculation that there would be no formal bids by close of business on Friday broke in the afternoon. Shares closed down 8.2 per cent at $1.10.

The day Fairfax announced the spin-off of Domain in February shares surged 8.1 per cent to 94¢. Shares continued to rise as speculation that TPG was circling the publisher emerged before an approach from the firm.

While Fairfax's share price will be under pressure on Monday with no formal offers for the business, the media company will firm as a major player in potential merger and acquisition activity expected to result from a change in media ownership regulation, which the government will attempt to push through the Senate when Parliament returns in August.

Communications Minister Mitch Fifield's media reform package is seeking the removal of the "reach rule", preventing networks from broadcasting to more than 75 per cent of the population, the "two out of three rule", preventing media companies from owning a TV network, radio station and a newspaper in the same market, a trimming of the anti-siphoning list, slashing of broadcast licence fees and restrictions on gambling advertising during live sport on TV.

TPG's interest in Fairfax emerged in February and its tilt at the publisher was well publicised before it gave its first proposal to the board on May 5.TPG originally came in with a 95¢ per share offer for Domain, Fairfax's metropolitan news brands the Financial Review, The Sydney Morning Herald and The Age, and the group's events and digital ventures.

The remaining assets, which TPG valued between 25¢ and 30¢ per share, including Fairfax New Zealand, the publisher's regional newspaper business, Macquarie Radio and Stan, Fairfax's 50-50 subscription video-on-demand venture with Nine Entertainment, would have been demerged into a new separately listed company under the original proposal.

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After widespread shareholder rejection, TPG later upped its bid to $1.20 for the entire company, valuing Fairfax at $2.7 billion.

Fairfax granted both private equity firms due diligence in mid-May and they had been in the data room for roughly five weeks before Friday.

A TPG spokesman confirmed the consortium's exit from due diligence and that it would not make a firm offer.

"TPG thanks the board and senior management team of Fairfax for the integrity and focus they have brought to the discussions," he said. "We commend the current management for the job they are doing in managing and growing a valuable collection of traditional and new media assets."

"If Fairfax can demonstrate that it is the best candidate to realise that additional upside, then all existing [Fairfax] shareholders would get the benefit of any future value uplift rather than just the successful private equity bidder," he said.

Mr Waislitz said shareholders could potentially benefit from the upside of Domain.

"Of course, [Fairfax] will need to communicate a much more detailed strategic vision for the company if shareholders are to be convinced to support them over the private equity bidders," he said.

"But the prize is the potential of the Domain group to be generating an EBITDA [earnings before interest, tax, depreciation and amortisation] of $200 million or higher over time [from the current levels of around $115 million]."

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Max Mason is The Australian Financial Review’s Media & Marketing editor. Based in our Sydney newsroom, Max is an award-winning journalist with nearly a decade of experience across a range of major publications. Connect with Max on Twitter. Email Max at max.mason@afr.com